This invention relates to enabling trading of financial products. More particularly, this invention relates to enabling trading of currencies.
Recently, electronic trading systems and platforms have become very popular for trading of financial products such as stocks, bonds, foreign currency, and any other suitable financial security or instrument. Options on currencies also form part of the subject matter of the invention and are typically referred to as FX options. FX options are a particular kind of financial contract that banks and corporations trade as a way of placing positions on the fluctuations in the exchange rates between currencies or to protect themselves from those fluctuations.
However, the capabilities of conventional electronic trading systems have not been expanded to exploit the transparency and other advantages of a real-time—i.e., a time, such as a few seconds, a few portions of a second or less, that is sufficiently short to provide users—i.e., individual users or groups of users—with a view of the current workings of the market—electronic market in currency options.
For example, real-time volume in an electronic trading system that was recently traded in the currency options market typically is not used to provide a basis for further trading. Rather, the trade matches, and then any new trades in the electronic trading system are typically matched at a different price, without any particular relationship with the previous trade.
In order to increase transparency and volume of trading in the currency options market, it would be desirable to use recently transacted volume as a basis for future trades.